After seven years, the fee for ATM transactions is being changed. The last time the Reserve Bank had reduced the number of free transactions in metro cities was in 2014. This rule was implemented on the withdrawal of money from ATMs of other banks.
Withdrawing cash from ATM will be expensive from January 1
ATM visits have reduced due to digital payments. With the introduction of mobile wallet, people now do the work of ATM from mobile itself. From vegetable-vegetable to auto-taxi fare or supermarket bill payment is done through mobile. Due to this, the rounds of ATM are less. After January 1, this number is going to decrease further. The reason for this is the cost of ATM transactions.
There is going to be a big change regarding ATM rules from January 1 of the new year. If you withdraw money from ATM after crossing the free transaction limit, then you will have to pay more money than now. Right now this fee is Rs 20 plus GST, but after January 1, it will be Rs 21 plus tax. Overall, you will have to pay a little less than Rs 25 on every transaction. Due to this, the number of people going to ATM will be less. Such experiments have happened in the past and the fee has been increased so that people can increase their inclination towards digital transactions instead of ATMs.
Changes happening after 7 years
If you live in a metro city, then 5 ATM transactions of your bank are free in a month. In metro city itself, you can do 3 more transactions from any other ATM. In non-metro cities, 5 transactions from other banks are free. Navroj Dastur, General Manager (South Asia), NCR Corporation, tells Bloomberg, “Since the beginning of COVID-19, it is being seen that people are withdrawing more cash from ATMs. Due to this, there is already a rapid increase in ATM withdrawals. Dastur says that after crossing the limit in the new rule, 1 rupee has been increased per transaction. This increased fee of Re 1 will hardly cause any inconvenience to the customers. May be people keep withdrawing money from ATM as before.
After seven years, the fee for ATM transactions is being changed. The last time the Reserve Bank had reduced the number of free transactions in metro cities was in 2014. This rule was implemented on the withdrawal of money from ATMs of other banks. In that rule, RBI had imposed a rule of recovery of Rs 20 from its bank’s ATM when the limit of free transactions is exceeded. Prior to that, the interchange charge was changed in 2012.
There have been changes in ATM charges year after year and the number of free transactions has been reduced. But its effect has been shown in another form. People may have reduced going to ATMs, but have increased the transaction size or amount of withdrawal. Jaishankar of Grant Thornton tells Bloomberg, “The number of ATM transactions has decreased in the last four or five years, but the amount withdrawn from ATMs has increased on average. Dastur says that with the increase in the number of ATM charges and free transactions, a balance is maintained between the industry and the consumers.
At present, 5 transactions are free in your bank and 3 in other bank’s ATMs. Accordingly, if a customer goes to ATM 8 times in a month, then it is enough. Jaishankar ji of Grant Thornton says that earlier there was subsidy on ATM fees, but this model did not succeed as it could give little benefit to the bank and operator. Higher fees help banks and ATM operators to increase the utility of ATMs. Since ATMs cannot completely replace the branch, they have the facility to provide services round the clock. The more these services increase, the more the chances of earning from it will also increase. With the increase in earnings, the operational cost of the ATM will come down.
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